Section 8 Housing for New Investor
Hello,
I am trying to gather opinions. I have a friend who recently reached out to me and told me his realtor he is working with sent him over a portfolio of section 8 housing. All of the homes when I looked over them with him after Cap X, Vacancy, Loan Costs, and Insurance are going to flow anywhere between $175-$230 a door. He was asking my opinion on section 8 but I have no experience with them. Would anyone be willing to offer me some advice that I can pass on to him.
-Would you purchase these?
-Is section 8 housing good to be into?
-Pros/Cons
-Any issues that have arisen
Most Popular Reply
@Jarrett Mel Williams, I agree with the opinions you have here. I specialize in Section 8 and have good tenants, paid rents and a portfolio that's easy to manage. I like the program a lot.
The key to doing S8 well comes down to 2 things - meticulous tenant screening and being good at managing details. How easy the local Housing Authority is to deal with, which varies widely across the country, will also impact the ease of management. That isn't something anyone other than someone in the local market who is successful with Section 8 can answer.
Here's the challenge I see with the deal - inherited tenants. I have inherited a lot of tenants, both market and Section 8, and almost all of them are tenants I wouldn't have approved through my screening process. I still buy tenanted properties but now I expect to deal with headaches that I wouldn't have to if they were "my" tenants." So I always figure that in.